TOKYO, Jun 18 (NNN-NHK) – Bank of Japan (BOJ) Governor, Haruhiko Kuroda, yesterday warned again that, the Japanese yen’s recent rapid depreciation is “negative” for the Japanese economy.
The central bank chief said that, currency moves should be stable and reflect economic and financial fundamentals.
The BOJ maintained its ultralow rate policy, after a regular two-day meeting that ended yesterday, causing the yen to slump sharply against the U.S. dollar, as the unchanged ultra-easing policy further diverged against the decisions of other central banks in the west.
In a press conference after the policy meeting, Kuroda said, monetary easing is necessary to achieve its two-percent inflation target stably and sustainably.
“The recent rapid weakening of the yen is raising uncertainty over the outlook, and making it hard for companies to draw up business plans, so it is negative and undesirable for the economy,” Kuroda said.
“We will have to closely watch developments in financial and currency markets and their impact on the economy and prices,” he said, adding that, the BOJ does not lead policy to target foreign exchange rates.
“Policy tightening is not appropriate at this point,” the governor said.
Kuroda emphasised his resolve to defend the upper limit on the benchmark 10-year Japanese government bond yield at 0.25 percent, even though other central banks have been raising interest rates to an unseen extent.
He said, BOJ does not plan to allow the yield to increase above that limit, by expanding the trading band, dismissing some market speculation that such a move would be possible.– NNN-NHK
